Comparing NU (NYSE:NU) and Beacon Financial (NYSE:BBT)

NU (NYSE:NU) and Beacon Financial (NYSE:BBT) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Valuation and Earnings

This table compares NU and Beacon Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NU	$15.77 billion	4.96	$2.87 billion	$0.74	21.78
Beacon Financial	$882.68 million	2.58	$90.27 million	$1.32	20.59

NU has higher revenue and earnings than Beacon Financial. Beacon Financial is trading at a lower price-to-earnings ratio than NU, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares NU and Beacon Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NU	18.65%	31.59%	4.97%
Beacon Financial	8.96%	9.15%	1.01%

Risk & Volatility

NU has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Beacon Financial has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for NU and Beacon Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NU	1	5	9	0	2.53
Beacon Financial	0	5	2	0	2.29

NU currently has a consensus target price of $17.94, indicating a potential upside of 11.30%. Beacon Financial has a consensus target price of $32.50, indicating a potential upside of 19.60%. Given Beacon Financial’s higher probable upside, analysts plainly believe Beacon Financial is more favorable than NU.

Institutional & Insider Ownership

84.0% of NU shares are owned by institutional investors. Comparatively, 83.1% of Beacon Financial shares are owned by institutional investors. 1.2% of NU shares are owned by company insiders. Comparatively, 1.1% of Beacon Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

NU beats Beacon Financial on 12 of the 14 factors compared between the two stocks.

About NU

Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.

About Beacon Financial

Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.